Reclamation Law:

Changes to Excess Land Sales Will Generate Millions in Federal Revenues

RCED-90-100: Published: Feb 1, 1990. Publicly Released: Mar 9, 1990.

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Pursuant to a congressional request, GAO reviewed the Bureau of Reclamation's management of the sale of excess land under recordable contracts that allowed landowners to irrigate their excess lands from federal water projects at subsidized rates.

GAO found that: (1) excess land buyers could obtain significant profits under current reclamation law, because they could buy the land at dry-land value and sell it at fair market value after 10 years; (2) federal water resources projects increased fair market values because of the availability of irrigation water; (3) the fair market value of the remaining 90,000 of the 121,000 acres of excess lands under recordable contracts that had pending sales actions would result in profits of as much as $206 million; and (4) the federal government could receive about $100 million of those profits if amendments to the current reclamation law required Bureau approval of the land's fair market value.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The Subcommittee Associate Staff Director has indicated that Chairman Miller does not have plans to introduce legislation as per the recommendation. Counsel for the Senate Committee on Energy and Natural Resources also has indicated that this recommendation is not a priority. The recommendation has been open for over 3 years.

    Matter: In order for the federal government to obtain the financial benefits from its construction of water resources projects, Congress should amend the Reclamation Reform Act of 1982 to require that excess land under recordable contract and excess land not under recordable contract but purchased to obtain federal project water be sold at a Bureau-approved fair market value, with the seller of the land receiving an amount equal to the dry-land value, plus improvements, and the U.S. Treasury receiving the balance. Specifically, Congress should amend Section 209(f)(2) of the Act by substituting "October 12, 1982 but before the enactment of the Reclamation Reform Act Amendments of 1990" for "the date of enactment of this Act."

  2. Status: Closed - Not Implemented

    Comments: The Subcommittee Associate Staff Director indicated that Chairman Miller does not have plans to introduce legislation as per the recommendations. Counsel for the Senate Committee on Energy and Natural Resources also has indicated that this recommendation is not a priority. The recommendation has been open for over 3 years.

    Matter: In order for the federal government to obtain the financial benefits from its construction of water resources projects, Congress should amend the Reclamation Reform Act of 1982 to require that excess land under recordable contract and excess land not under recordable contract but purchased to obtain federal project water be sold at a Bureau-approved fair market value, with the seller of the land receiving an amount equal to the dry-land value, plus improvements, and the U.S. Treasury receiving the balance. Specifically, Congress should amend Section 209(f) further by adding the following after (2): "(3) in the case of disposals of excess lands, including such land not under recordable contracts, made on or after the enactment of the Reclamation Reform Act Amendments of 1990, the disposal of excess lands to non-excess owners shall be for the fair market value of the land, which shall be paid to the excess owners except for fair market value related to the delivery of irrigation water, which shall be deposited in the Treasury of the United States as miscellaneous receipts. Upon such disposal, the title to these lands shall be freed of the burden of any limitations on subsequent sale values which might otherwise be imposed by the operation of section 46 of the act entitled "An Act to adjust water rights charges, to grant certain relief on the federal irrigation projects, and for other purposes," approved May 25, 1926 (43 U.S.C. 423e)."

 

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